AngloGold says its ageing mines are caught in trap of diminishing returns
AngloGold Ashanti could cut up to 8500 jobs at its unprofitable South African mines, reducing its workforce by nearly a third.
AngloGold, the world’s third-largest gold miner, said it had started talks with organised labour to reduce the size of its 28000-strong South African workforce because of “heavy and ultimately unsustainable losses”.
“This is a difficult decision and also the evaluation of the options available to return our South African business to profitability,” said AngloGold CEO Srinivasan Venkatakrishnan.
“It is critical that we act to protect the long-term sustainability of this business and the majority of our workforce.
“We are mindful of the sensitivity that this situation demands, and we are committed to supporting all our employees throughout this process.”
The plans include putting the Kopanang and Savuka mines onto care and maintenance and folding parts of the TauTona mine into the nearby Mponeng mine.
TauTona’s all-in sustaining costs in the first quarter of 2017 were $1737/oz and Kopanang’s $2399/oz – against an average $1216/oz received price in that time.
“Some of our older mines in the South African region have reached the end of their economic lives several decades after they started production,” AngloGold said.
“These mines face systemic challenges, including near-depletion of ore reserves, increasing depth and distance from central infrastructure, declining production profiles, and cost escalations that have continued to outpace both inflation and a subdued gold price,” it said.
Trade union Solidarity said AngloGold had cut 990 jobs recently and its deputy general secretary of mining, Connie Prinsloo, said this latest round of retrenchments could be followed by more job cuts after the publication of the mining charter.
Mining companies and lawyers have rounded on the new charter unveiled by Mining Minister Mosebenzi Zwane earlier this month.